Panama Papers Firm Raided

Offshore Account Update

Posted on April 29, 2016 |

The Panama Papers is the name given to a leaked database of the Panama law firm, Mossack Fonseca. The law firm is the fourth largest offshore firm worldwide and its focus is on incorporating offshore businesses and opening offshore accounts.

The Panama Papers which were leaked include extensive details, including the names of accountholders and information on how corporations were created and how money was moved. The papers provide an unprecedented insider glimpse into how the world of shadow banking works and how money moves across the globe as part of efforts to prevent taxing authorities from discovering it.

Representatives from multiple countries are now attending a summit in Paris organized by the Joint International Tax Shelter Information and Collaboration (Jitsic). At this summit, information from The Panama Papers will be reviewed in detail.

Shortly before the summit, Mossack Fonseca was raided by Panama police, so the files and information uncovered at that time will also be under review by local authorities. All of this is part of an ongoing worldwide crackdown in which aggressive efforts are made to try to fight tax evasion wherever it occurs.

Accountholders who may not have followed all the rules for reporting offshore funds need to be aware that taxing authorities are learning more than ever about how tax evasion is facilitated. Banks and financial institutions are also being forced to cooperate with taxing authorities and reveal accountholder information to avoid threats of prosecution. 

With such a sustained and aggressive focus on fighting tax evasion, it is likely that your account details will eventually be revealed to the IRS. You should talk with a New Jersey criminal tax lawyer before that happens so you can find out if you can avoid criminal prosecution through participation in a voluntary amnesty program called the Offshore Voluntary Disclosure Program (OVDP).

Details About the Raid at Mossack Fonseca  

The Guardian reported on the raid on Mossack Fonseca that recently took place.  The Attorney General of Panama ordered the raid to get more information on whether the firm aided and abetted tax evasion. Mossack Fonseca, however, insists that the firm did not do anything wrong and that the firm simply set up companies and accounts for investors. It was not the firm's responsibility or role to know what accountholders were doing with the accounts afterward.

It remains to be seen if Mossack Fonseca will end up facing any criminal charges in connection with whatever role it may have played in helping accountholders hide their identity or hide their money. 

Panama officials are concerned that the country has been labeled as uncooperative by France in terms of financial disclosures, and additional steps are being taken, including the creation of an international panel to advise on legal and business issues.  Panama authorities may perhaps be aggressive in going after Mossack Fonseca to show their intent to cooperate and help taxing officials worldwide.

Regardless of what happens, The Panama Papers will be studied by countries at the Paris summit and the information will likely be used to help fight tax evasion. 

Taxing authorities not only have details from the Panama Papers, but also information from many financial institutions who are participating in the Swiss Bank Program. This program makes it possible for banks who may have helped with tax evasion to avoid prosecution by paying a fine and giving up information on accountholders.

Accountholders need to know about the increasingly aggressive efforts on the part of taxing authorities. That said, accountholders are encouraged to speak with attorney Kevin Thorn to find out what options they have for protecting themselves from criminal charges.

Thorn Law Group

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